Prescription: Patient Centered, Free Enterprise Health Care Reform

The prescription for fixing our health care system is certainly not central planning, socialization or government run health care.  It is not throwing $trillions at a flawed system.  It is also not to dismantle all the great things about our current system that blesses Americans with the highest survival rates in the world for many serious diseases.

The malaise in our present system is not a failure of capitalism but a lack of it.  The solution is quite simple really.  Apply the principles of capitalism that have made our country the richest in the world to the health care economy.  Those principles were muddied with the advent of the third party payer system in the late 1940s and were trashed altogether with the advent of the government run system of Medicare in the 1960s.  in a nutshell: infuse capitalism and free enterprise into the system, cover all Americans, Align the incentives for all participants and restrict the role of government.

Here then, is our prescription for patient centered, free enterprise health care reform:

Basic Principles:

• Private insurance for all Legal residents of the USA
• Competition at every level
• Individual choices of Insurer, benefits, providers
• Limited role of government and employers
• Tort reform and simplified, no-lawyer claims option
• Citizen boards to oversee and adjudicate consumer disputes with insurance companies

Provisions:

• There must be competition at every level of the system.
  • Insurers will compete to be the choice of individuals and families by offering better benefits, lower prices, better providers, better service, etc.
  • Providers will compete to be included in insurance networks on the basis of willingness to share risk, efficiency, quality, low total costs, customer service, etc.
  • Insurers will compete to attract the highest quality, most efficient providers on the basis of contractual provisions, payment terms, patient volume, claims environment, reputation, etc.
  • Employers will compete for employees on the basis of work environment, job security, benefits offered, contribution toward benefit cost above minimum, compensation, etc.
• We must continue progress in medical science and in extending humanity’s lifespan and quality of life.  We must not discontinue or stifle research as suggested by current administration
• We must make new discoveries easier and less expensive to bring to the public.
  • Regulators will be limited to judging the safety not the efficacy of new drugs and procedures.  Let the efficacy be judged by physicians and patients in the market place.
  • This will eliminate $billions in costs
• There will be adequate, portable, affordable health insurance available to every legal resident of USA
  • No individual underwriting or health questions
  • No pre-existing condition exclusion.  Standardized limitations and exclusions for all policies.
  • Minimum benefit standard.  Insurers may increase but not decrease coverage.
• Limit the role of government in health care to setting standards, funding infrastructure, and subsidizing the cost of coverage for low income families.
• Ignore the trial lawyers who seem to control our state and national legislatures and reform the tort process for claims against health care providers.
  • Establish regional citizen arbitration panels to settle these disputes.
  • Panel members appointed by State Commissioner who is elected by the people to one four year term.  No re-election.
  • Panel members serve one two year term.  No reappointment.
  • Simple procedures.  Attorney representation optional
• Establish under the state insurance commissioner, regional citizen boards to adjudicate consumer complaints against insurance companies for denial of claims, coverage or care.
  • Board members serve one two year term.  No reappointment.
  • Simple procedures.  Attorney representation optional
  • Denial of care disputes handled on an expedited basis and settled within five (5) working days.
• Eliminate all government run health care programs including Medicare and Medicaid.  Replace these programs private insurance plans, providing each participant with the choice between several competing insurers. Shift funding from these government run plans to subsidize the individual’s purchase of private insurance.  Current government run programs are very inefficient.  They do not allow competition and focus on price fixing instead of total cost of care. (Price is only one component of total cost.  Utilization, quality and efficiency have a greater impact)  They pay all like providers the same price disregarding quality experience, efficiency, or ability to deliver high quality for the lowest total cost.
• Health insurance will be funded through a combination of employer and employee contributions, government subsidies and shifting of costs from a multitude of less efficient health care systems now in effect.
  • Point of service cost sharing.  No health care expenses will be covered by insurance at 100%.  A series of point of service co-payments will be established according to income levels and ability to pay.  The principle is that there will always be an affordable cost to be borne by the individual using the health care system.  An individual or family’s total out of pocket expense will be capped appropriately.
  • There will be a minimum employer funding mandated as a percentage of payroll.  Employers may compete for employees by funding above the minimum.
  • Coverage for low income employees will be funded by employee contributions that are limited to a percentage of income as well as a flat dollar cap. The balance of premiums will be funded by employer contributions.  Employer contributions for low income employees in excess of those funded for other employees will be recovered by the employer through federal tax credits, thereby shifting the subsidy cost to the federal government.
  • Those who are currently “uninsured” do receive health care, albeit unreliable, humiliating, highly inefficient and ineffective (thus the most expensive health care in the U.S.).  This hodge podge is currently funded by a combination of state and federal funded programs such as Medicaid and CHIP and a variety of uncompensated care delivered in hospital emergency rooms, charity clinics and hospitals, government facilities maintained for the indigent, etc.  These scattered costs will be identified and re-channeled into the mainstream system to purchase private insurance for these people that will they will be treated exactly the same and have the same choices and privileges as others having insurance.
• Each family must have a choice of insurers independent of the funding source (employer, etc.)
  • They may choose insurer based on providers included in network, or:
  • choose providers based on participation in desired insurer’s network.
• Those who are employed will have insurance provided through their employer with multiple insurer, benefit and cost options
  • Employer will not “sponsor” plan in the sense of today’s system and will not have liability as a plan sponsor.
  • Employer’s role will be limited to:
    • Providing information to insurers and employees
    • Providing administration of eligibility, enrollment, premium payment, etc
    • Funding employer’s share of plan costs and collecting employee contributions and government tax credits.
• Anyone who is not eligible for insurance through an employer will also have multiple insurer, benefit and cost options as an individual or family.
• The federal government will establish an infrastructure to enable a highly efficient Electronic Medical Records (EMR) system.
  • There are many complex technical issues that must be addressed but the following requirements are a must for any EMR system:
    • The system must reside in “the cloud” and require only a computer and a browser for a provider or patient to access and or update the system.  It must not require any expensive proprietary software or hardware.
    • The record itself must be owned by the patient who will also have power to control access to the information.
  • The benefits of such a system will be enormous.  Credible sources estimate that as much as 40% of our nation’s health care bill could be saved if such a system were employed correctly. Some of the benefits to be derived:
    • Virtual elimination of duplicate tests and treatments
    • Elimination of costly first visits to a physician that pays the physician extra for having you fill out those “history and physical” forms that you probably never fill out the same way twice.
    • Improved medical decisions resulting from all physicians working with the same accurate, up-to-date information.
    • Empowers routine screening of records by software designed to compare the treatments and medications prescribed by all the various physicians and specialists who are treating a patient, spotting potential adverse interactions and contra-indications.  This will save huge amounts of care and countless lives.
    • Data mining may hold the highest potential value.  Taking information that now exists in inaccessible paper files and a multitude of incompatible digital files and capturing it in a powerful national data base could hold the key to:
      • Determining the most effective protocols, medications chemotherapies, etc. for specific illnesses and conditions,
      • Identifying the most efficient providers and methods,
      • Identifying correlations between various conditions that have not heretofore been linked,
      • Detecting unintended effects of various medications and treatments that could be either good or harmful.
      • Identifying trends in health and care
      • Diagnosing various conditions more quickly and accurately based on analysis of symptoms and test results
      • Potential cures for presumably incurable diseases
      • AND SO MUCH MORE!

Summary

You will notice that nowhere in this prescription do we rely on central planning or governmental control.  Indeed the role of government is strictly limited.  Neither do we leave private citizens at the mercy of the large insurance companies.  All citizens are made to be equal and treated as such.

A skilled analysis of this plan will determine that it will provide health insurance to all and will be budget positive, not budget neutral.  It will not increase the deficit.  It will more than pay for itself by dramatically reducing waste, improving quality and efficiency and by diverting funds from antiquated inefficient programs into an efficient, free enterprise system driven by the principles that have made this country the richest nation in the world for more than a century.

This prescription introduces health care providers to the principles of capitalism and free enterprise for the first time since WWII. Health insurers and health care providers will have to compete on a level playing field to attract informed consumers who have freedom of choice. A novel idea!

Above all, the incentives of this system are aligned.  All parties, patients, providers and insurers are rewarded for patient focused, rational, reasonable behavior.

Tagged as: Capitalism, Free Enterprise, H.R.3200: America's Affordable Health Choices Act of 2009, Health Care, Health Care Reform, Patient Centered